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The European Court Allows Spanish Judges to Cancel IRPH-Linked Mortgages if they are Abusive

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The Court of Justice of the European Union has opened the door for consumers with mortgages linked to the Mortgage Loan Reference Index (IRPH or ‘Índice de Referencia de Préstamos Hipotecarios’ in Spanish) to appeal to their banks, by ruling that Spanish judges are responsible for determining whether the clauses of these mortgage contracts are “abusive.”

The Luxembourg-based court has specified that if the clauses are deemed abusive, then the national judge may substitute IRPH for another legal index, such as Euribor, “to protect the consumers in question from the particularly damaging consequences that could result from the cancellation of their loan contract”.

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